The molecular and cellular events underlying the formation and differentiation of mesoderm to blood and other derivatives are critically important for our understanding of mechanisms of normal development and of disease. Knowledge of hematopoietic development has benefitted enormously from methods that allow populations of cells at different stages of commitment to be isolated and characterized. Few surface markers are available for the isolation of very early mesodermal cell populations committed to the hematopoietic and vascular lineages. The earliest known cell surface marker of mesoderm is Flk1. Based on expression of Flk1 and Podocalyxin (Podxl) proteins, we succeeded in separating the primitive (embryonic, EryP) and definitive (adult) hematopoietic and vascular lineages in ES cell-derived embryoid bodies and demonstrated that the same subpopulations are present in mouse embryos. We developed transgenic mouse lines in which fluorescent proteins are expressed exclusively in EryP, permitting their tagging and tracking through gestation. Our ability to isolate and FACS puriy distinct, synchronized populations of EryP allowed us to define global gene expression profiles during six distinct stages of development, from progenitor (yolk sac) through circulating and fetal liver stages. Progenitor stage EryP expressed a set of genes involved in the canonical Wnt/-catenin pathway, known to be essential for normal gastrulation and mesoderm formation. By analyzing mice doubly transgenic for reporters for Wnt/-catenin (GFP) and EryP (CFP or cyan), we discovered that the canonical Wnt/-catenin is active in most EryP progenitors and that there is a gradient of Wnt activity such that the highest progenitor activity is found in cells with the highest Wnt pathway activity. Interestingly, the caonical Wnt pathway is also active in immature definitive erythroblasts in the fetal liver. An understanding of the Wnt pathway during ontogeny is pertinent to human disease because it is reactivated during hematopoietic regeneration and is subverted in certain leukemias, although it does not appear to be essential for HSC function or lineage specific hematopoietic differentiation in the adult. In this proposal, we will test the hypotheses that: () the primitive and definitive hematopoietic and cardiovascular lineages arise from distinct subsets of mesodermal progenitors; (2) the Wnt/-catenin pathway regulates erythroid development; and (3) the canonical Wnt signaling pathway primes the erythroid response to TGF1.